The law firms of RileyCate, LLC and Relman Colfax filed a lawsuit in federal court in the Southern District of Indiana against Old National Bank alleging Old National engaged in lending discrimination in the Indianapolis area. The law suit, filed on behalf of the Fair Housing Center of Central Indiana, alleges that Old National engages in “redlining” which is the practice of not making mortgage loans to African American borrowers and those living in majority African American neighborhoods.
Old National is headquartered in Evansville, Indiana with 166 branches in Indiana, Kentucky, Illinois, Michigan, Wisconsin, and Minnesota. Its application to merge with First Midwest Bank is currently pending before the Federal Reserve Bank of St. Louis.
The law suit claims as follows: Old National avoids providing access to mortgage credit to Black residents and deliberately seeks to limit its residential lending business to predominantly white areas and white customers. Of all the banks in the country, Old National should be attuned to the country’s fair lending laws and the need to make loans available in communities of color. In 2018, Old National acquired Minnesota-based KleinBank which had just entered into a settlement agreement with the United States Department of Justice to resolve the government’s redlining claims against KleinBank.
As alleged in the complaint, Old National made over 2250 loans in the Indianapolis Metropolitan Statistical Area (MSA) during 2019-2020, but only 37 were to Black borrowers, and just 23 of those were in Marion County (nearly coextensive with the city of Indianapolis) where there are over 263,000 Black residents. The bank made 91.4% of its loans in the MSA to white borrowers and only 1.78% to Black borrowers.
According to data, Old National’s peers do far better at serving Black customers. Its closest peers made 14.7% of their Marion County mortgage loans to Black customers compared to only 3.86% for Old National, a nearly four-to-one disparity. Old National also lags far behind its peers in applications from Black customers.
Over the past decade, Old National has reduced the number of its branches serving Black neighborhoods. In 2010, it had six branches in Census tracts that were at least 25% black, including two in tracts that were over half Black. Today it has only two in areas that are 25% black and none in areas that are more than 50% Black. None of Old National’s Mortgage Loan Officers is located in a branch in a Black neighborhood, actively discouraging prospective Black customers from applying for loans or banking with Old National. All of its Mortgage Loan Officers in Marion County work out of the bank’s “Wealth Management” location, in a Census tract where only 2% of the residents are Black.
RileyCate, LLC attorneys Matt Keyes and Russell Cate are co-counseling with the team at Relman Colfax consisting of John Relman, Glenn Schlactus, Sara Pratt, and Alexa Milton.
Read more Here:
- Complaint alleges Old National Bank discriminated against Black borrowers, Indianapolis Recorder, October 7, 2021
- Old National Bank hit with federal complaint alleging discrimination, WISHTV, October 7, 2021
- Fair-lending suit puts heat on Old National-First Midwest deal, American Banker/National Mortgage News, October 7, 2021
- Old National Bank accused of discriminating against Black mortgage borrowers, Indy Star, October 7, 2021
- Lawsuit alleges Old National Bank redlined against Blacks in Indianapolis, Indiana Lawyer, October 7, 2021
- Lending discrimination alleged against Old National, WFYI, October 7, 2021
- Fair Housing Center files lawsuit against Old National Bank alleging lending discrimination, WTHR, October 7, 2021
- Central Indiana Fair Housing Center alleges discrimination by Old National Bank against Black mortgage applicants, files redlining lawsuit against lender, FOX 59/CBS, October 8, 2021
- Fair lending group sues Old National as bank pursues M&A deal, S&P Global, October 8, 2021
- Fair-housing group sues Old National over alleged redlining ahead of merger, Banking Dive, October 8, 2021
- Ind. State Rep. Pryor Issues Statement on Redlining After Recent Developments Call the Practice Economic Deprivation, Advisor News, October 9, 2021
- Old National Bank sued for alleged redlining practices, Housing Wire, October 11, 2021